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What to consider if you want to borrow more on your mortgage
If you’re an existing Halifax mortgage customer and need to borrow more money, a Further Advance could be right for you. It’s a secured loan you can use for a number of purposes. It’s similar to a loan in that you repay the money with interest but there’s one key difference: it is secured against your home which means it usually offers a lower rate of interest.
As part of our commitment to helping you make an informed decision, here are some things to consider when taking out a Further Advance.
- Is a Further Advance right for me?
- What commitment do I need to make?
- Are there any risks?
- What else should I think about before I commit?
Is a Further Advance right for me?
To take one out, you need a Halifax mortgage as repayments for your Further Advance will be added to your mortgage repayments. You can use it for a whole range of purposes like making home improvements, buying a car or paying off outstanding loans.
There are different types of borrowing that may suit you better like personal loans, credit cards or an authorised overdraft, which you may wish to consider.
What commitment do I need to make?
Your biggest commitment is making your repayments. As part of the application process we’ll work with you to ensure you can afford your new monthly mortgage repayments (these will be higher as they will include your Further Advance). To do this you’ll need to give us personal details like your monthly outgoings. We’ll also look into your credit history by consulting a credit reference agency.
We’ll give you a Key Facts Illustration with a breakdown of the deal you’re interested in. This will show the interest rate of the Further Advance, the arrangement fee and, depending on the deal you choose, you may be charged a product fee too. You can add these fees to your mortgage and pay interest, or simply pay the fees up front. With some deals, an Early Repayment Charge may apply so you may have to pay a fee if you want to switch to a new deal or leave before your old one ends. There may be other fees on certain products, make sure you ask before you buy.
Think carefully before securing debts against your home. If you can’t keep up with your monthly repayments or you get into financial difficulties we would work with you to sort something out, but as a last resort, we can sell your home to recover the money we lent you.
Please remember, house prices can go down as well as up. If you owe more than the current value of your home, you will be in negative equity. Borrowing close to the current market value of your home could put you at risk of being in negative equity. If you need to move home and sell your property, and if its value has dropped below what you paid for it there may be a shortfall between your mortgage and the amount you get for the sale which you need to repay.
What else should I think about before I commit?
You can choose to repay your Further Advance over any period up to the term of your mortgage. The longer you take to repay, the lower your monthly repayments will be, but the more interest you’ll be charged.
Consider how you’ll cope if your repayments were to increase, for example, if there were any changes to the interest rate.
What will you do if your circumstances change, for example, if you lose your job? We can discuss ways to protect you.
If you wish to borrow more than 90% of the value of your home, we may need to revalue your property. This incurs a cost, so we’ll let you know in advance if this is necessary. You may also incur a Higher Lending Charge if you borrow over 90% of your property’s value.
Next Steps
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Find out more about the Halifax Further Advance. |
Speak to one of our advisers on 08458 50 37 09 * (Lines are open 8am to 8pm Mon to Fri, 9am to 4pm Sat)
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If you'd like to discuss other aspects of your finances, find out more about our in-branch Customer Review service. |
Your home may be repossessed if you do not keep up repayments on your mortgage.
* Calls from BT landlines will cost a maximum of 4p per minute and a 6p call set-up fee. The price of calls from other telephone companies will vary. The call price is correct at January 2008. We may monitor and record telephone calls to help us provide a higher level of service.
